Study Tools

Thomas Edison

Lighting up the World

New Directions

Summary

After the opening of the Pearl Street Station, Edison
underwent a series of legal and market battles. The first of these
was with the inventor Joseph Swan, who filed suit against Edison
in 1881. Swan claimed that he had prior claim to the ideas Edison
utilized in preparing his lamp, a claim that was almost certainly
true, but Edison was the one who produced a practical version of
this lamp. All the same, a court victory was uncertain, and Edison
went to Swan with a settlement plan. In 1883, the two inventors
created Edison and Swan United Lighting Company, Ltd. In 1886,
the British courts upheld Edison's basic carbon filament patent,
keeping competitors from initiating legal actions of their own.
This victory gave Edison and Swan United a near monopoly on the
business until 1894.

A number of other competitors filed suit against Edison
between 1885–1900 after the U.S. patent commissioner ruled that
another inventor had established precedence to an electrical lamp
with carbonized paper. The Edison group spent almost $2 million
defending itself in court. The protracted legal battles drained
the company of capital and kept its focus off of inventing for half
a decade.

The most important battle began in 1885, when Edison's
group filed suit against the United States Electric Company and
George Westinghouse, for infringement of the carbon-filament patent. After
complex and difficult legislation, the courts eventually upheld Edison's
patent in 1891 and again in 1892. Instead of giving up, Westinghouse
quickly set about battling Edison in a more effective way: in the
marketplace.

Westinghouse was a self-taught electrician and inventor
whose primary inventions lay in train technology. Among other things,
he had invented an air brake for trains in 1869. He became Edison's primary
rival in 1886, when he built the first commercial AC system in
Buffalo, New York.

Westinghouse began developing this system in 1885. He
was disenchanted with Edison's system, the direct current system
(DC), which had distance limitations because voltages could not
travel far on a line without losing power. Edison's system was
most useful in densely populated urban areas. Westinghouse envisioned
a long-distance transmission system with alternating current, or
an AC system. He created one with a new transformer that reduced
high transmission voltages of up to 1000 Volts to safe levels by
reducing voltages at substations along the line.

Edison's DC system transmitted voltages at only 240V,
but he contended that his was the safer and more effective system.
As AC systems rapidly gained market share, a nasty public battle
ensued over the safety of Westinghouse's system. As AC system voltages were
used for new electric chairs and to kill cats and dogs, Edison turned
his crusade against Westinghouse into a crusade for public safety.
Meanwhile, Westinghouse concentrated on developing the system devices
that would make his AC system dominant in the field. He also took
advantage of special opportunities to publicize his AC system, such
as the famous "White City" exposition at the Chicago World's Fair
in 1893.

Ironically, the people who paved the way for Westinghouse's
AC system to become the dominant electrical system in the United States
were former Edison employees. One of these, Nikola Tesla, was a
Serbian electrical engineer who came to the United States to work
with Edison in 1884. He left the Edison factory to develop his own
inventions and is credited with inventing the polyphase induction
motor, a device, which allowed for long-distance application of AC
electrical power. The other invention was a rotary converter by Charles
Bradley, another former Edison employee. The converter was patented
in October 1888 and combined elements of the AC system with the
DC system, making it possible to connect high-voltage transmission
lines to the DC central station and distribution networks. Thanks
to these inventions, plus the hard marketing work of Westinghouse,
AC systems were America's primary electrical distributors by the
1920s.

Analysis

Edison learned in the mid-1880s that he could be on the
losing end of court battles and market share despite his winning
streak. Once again, this was a valuable and painful lesson about
the business world that he applied to his later inventions. From
the battles with Joseph Swan, Edison learned that patents were
invaluable, but only if they established precedence over the idea
as well as the product. He also learned that settling out of court
could save time and money for both parties.

The battles with Westinghouse introduced Edison to the
fight for market share in the most ruthless ways. As he had learned
from his experience with Alexander Graham Bell, a patent for a
commercially successful product could be circumvented if an inventor
could improve on that product in a new and unique way. To be on
the opposite end of that principle, however, was a shock. And unlike
his experience with Bell, the courts did not save Edison from losing
the competition. The public made the final judgment on AC vs. DC
systems, and Westinghouse was declared the winner.

To his credit, Edison fought a grim and tenacious battle
against Westinghouse. And while he was most concerned with preserving his
own market share, he was very concerned about the potential public
hazards of using such a high-voltage system. His press packets
on the danger of AC systems contained truth, and he would eagerly
demonstrate his points for the press by using high voltages to
electrocute stray cats and dogs in the Menlo Park laboratory. At
the very least, Edison's loud protestations for public safety forced
Westinghouse to take comprehensive safety precautions in developing
his AC system on a large scale.

The defection of Edison employees brings up another point about
Edison's behavior as the chief inventor at the Menlo Park laboratory.
While Edison emphasized a non-hierarchical structure at the laboratory,
he was very careful to make it clear that all inventions at the
Menlo Park laboratory belonged to him. Employees were not encouraged
to make their own inventions and file their own patents. While
this arrangement was crucial for infringement concerns, it discouraged
many talented young inventors. They grew frustrated with the rules
at Edison's laboratory and struck out on their own, often creating
devices that helped Edison's competition.